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Creating the Business Case for Enterprise Service Management

By | November 13, 2018 in ITSM

ESM
There are many reasons for adopting an enterprise service management (ESM) strategy – i.e. the widespread use of IT service management (ITSM) principles, best practices, and technology in other business functions. It could be a need to achieve all three of “better, faster, cheaper,” or perhaps the delivery of automation and other back-office-performance enhancing capabilities as part of digital transformation.

But if you’re sat there contemplating your organization’s first foray into enterprise service management, or looking to further invest in it (beyond just the adoption of the corporate ITSM tool by another business function), then how do you build a business case that can add more color to the calculation of the time (and therefore money) saved by the automation of back-office operations and other labor-saving capabilities?

In this blog, I share some statistics from the new HDI “The State of Enterprise Service Management” report that show how the organizations that have already invested in enterprise service management have benefitted; which will hopefully be of use in your business case for enterprise service management.

The Level of Enterprise Service Management Adoption

As described in the blog: “Enterprise Service Management Good Practice: The Vital Third Part of Digital Transformation,” when organizations are asked whether they’ve adopted enterprise service management there’s a spectrum of scenarios that can elicit a “yes” response. With two common ones being:

  1. The use of the ITSM tool by other business functions – for instance, “Let’s use the ITSM tool to help HR”
  2. A proactive approach to systematically share ITSM best practices and technology across the organization

The HDI survey addressed this by asking two discrete adoption questions to the 363 respondents:

  1. Are the principles of service management being applied outside of IT?
  2. Is your service management solution being used outside of IT?

The first – related to ITSM principles – found that 27% have applied them outside of IT with another 32% planning to do so. And these figures might not seem particularly high.

However, the second question – related to ITSM tool use outside of IT – found that 62% already do with another 21% planning to do so.

Which makes enterprise service management, at least in the form of ITSM tool use by other business functions, as popular in North America as the adoption of ITIL (which was 64% of the survey respondents).

The Why of Enterprise Service Management

The 2018 HDI survey asked: “What business drivers are influencing the expansion of service management outside of IT?”

This offered an interesting perspective of what’s driving the extension of ITSM beyond IT, with the top-scoring response being to “Improve the customer experience” at 77% – where the “customer” is viewed as both internal and external consumers of service and support services.

The sensible next question is then whether or not this has been achieved.

The Positive Impact of Enterprise Service Management on Employee Satisfaction

The HDI survey asked: “How has employee satisfaction changed since expanding service management outside of IT?” And, before providing the survey results, it’s worth stating that there will, of course, be other factors that could be influencing any increase or decrease in employee satisfaction outside of the improvements that enterprise service management can bring. For example, the level of enterprise-wide pay rises or cuts, or negative changes to the work environment.

Bearing this in mind, it’s still interesting to consider the results of the HDI survey, with:

  • 52% of organizations seeing an increase (in employee satisfaction)
  • 42% of organizations seeing no change
  • 5% of organizations seeing a decrease

Especially when this is considered alongside another survey statistic.

The Positive Impact of Enterprise Service Management on Employee Productivity

This not only helps to explain the above rise in employee satisfaction but also impacts the aforementioned need for “better, faster, cheaper.”

The HDI survey asked: “How has productivity changed since expanding service management outside of IT?” With the majority of survey respondents stating that their organization had seen a productivity improvement, with:

  • 75% of organizations seeing an increase (in productivity)
  • 23% of organizations seeing no change
  • 2% of organizations seeing a decrease

And this was despite the lack of investment in organizational change management (OCM) by the organizations sharing ITSM principles and tools beyond IT – with only one quarter of the enterprise-service-management-using respondents stating that they had a formal OCM program in place to support the changes in ways of working.

As to what this last stat means – there are a variety of conclusions. On the one hand, it could mean that the realized benefits could have been even greater with an appropriate investment in OCM – in particular in removing, or reducing, the resistance to change. And on the other, it could mean that the expansion of ITSM, via enterprise service management, is something that employees in other business functions are quick to:

  1. Understand the reasons for (including the “What’s in it for me?”), and
  2. Adopt in terms of the new ways of working

Sadly, it’s impossible to tell from the HDI data if these, or other, things have resulted from the reported lack of OCM.

Creating the Business Case for Enterprise Service Management

Like any corporate request for additional funds to “do something different,” a properly thought out and financially-backed enterprise service management strategy needs to stack up in terms of the benefits realized versus the costs incurred.

In creating such a business case, and as with the introduction of ITSM technology within IT, this will involve estimations as to how the new ways of working and technology will improve the business functions that they’re applied to. For example, it might be agreed that enterprise service management will speed up case handling in human resources (HR) by at least 10% – this figure can be estimated internally – with this unit time-saving extrapolated and costed for annual operations.

These transaction-based time and cost savings can be significant, but they only address part of what might be a desire for “better, faster, cheaper.” And this is where the HDI, and other industry, statistics can be used to provide an extra layer – or perspective – of the available benefits.

These enterprise-wide, employee-based benefits can either be included as soft benefits, without a financial saving attached, or they too can be costed to add weight to the business case. Ultimately, this will depend on the objectives and ambitions of your organizations – for example, increasing employee satisfaction through a better employee experience might be seen as a critical enabler for improving customer experience.

Hopefully, these HDI statistics will prove useful in your organization’s justification for taking ITSM principles and tools beyond IT. If you have other insights to share or have questions, please leave them in the comments section.

Stephen Mann

About Stephen Mann

Stephen Mann is an independent IT and IT service management content creator, and a frequent blogger, writer, and presenter on the challenges and opportunities for IT service management professionals. In his career, he’s held positions in IT research and analysis (at IT industry analyst firms Ovum and Forrester), IT service management consultancy, enterprise IT service desk and IT service management, IT asset management, innovation and creativity facilitation, project management, finance consultancy, internal audit, and most recently product marketing for a SaaS IT service management technology vendor.

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